Certain jointly held properties will need to go through probate, while others can avoid it. Jointly owned property is a type of property owned by two or more individuals. Since there are several types of jointly owned properties and their characteristics determine whether or not they must go through probate, it’s important to understand their differences.
Tenancy in Common
This is the one type of jointly held property that will require probate once an owner passes away.
Tenancy in common entails the joint ownership of a property involving two or more people in either equal or unequal share. Each is allowed to sell their share independently or leave it to a third party after the owner has died.
Joint tenancy, also often referred to as “joint tenancy with right of survivorship,” is a certain form of ownership for individuals who want to avoid probate when passing the property on to the other owner. However, it can be restrictive and result in issues regarding tax.
Under a joint tenancy ownership, two or more people will own the property and have equal shares. The owners can’t sell the property or share their interest in it without ending the joint tenancy. If one owner dies, the deceased owner’s interest then passes over to the surviving owners. Now, the current owners can mortgage, sell or pass on the property without issue, but once the last owner passes, the property will need to go through probate provided there isn’t a living trust or transfer-on-death deed.
Tenancy by the Entirety
Tenancy by entirety is a specific type of joint ownership intended for domestic partners or spouses. Similar to joint tenancy, a property can pass from the deceased owner to the surviving spouse without any need to go through probate. However, the spouses will own the property as a single unit without separate shares.
Marriage or domestic partnership is needed for this type of ownership, and the ownership will fall into the tenancy in common if a divorce or dissolution takes place. Also, spouses can’t change the ownership independently, but can together determine if they would like to change the form of ownership.
Getting Legal Assistance
Each form of ownership can have a significant impact on taxes, rights, and control over the property. With the advice of a probate lawyer, owners can avoid these issues.